Summaries of health policy coverage from major news organizations

Governor Signs $145B Budget With Cuts to Medi-Cal, Mental Health

Gov. Arnold Schwarzenegger (R) on Aug. 24 signed a $145 billion state budget for fiscal year 2007-2008 after using his line-item veto authority to cut funds from Medi-Cal and mental health services to help reduce state spending by $700 million, the San Francisco Chronicle reports (Yi, San Francisco Chronicle, 8/25).

The budget was signed after Senate Republicans provided the necessary votes to pass a spending plan after several demands were met, including a pledge by the governor to use his veto power to reduce the operating deficit to zero. The budget stalemate lasted 52 days (California Healthline, 8/22).

During the budget standoff, more than $1 billion in Medi-Cal payments to hospitals and other health care providers were delayed (Rauber, San Francisco Business Times, 8/24).

Medi-Cal Cuts

The largest veto by Schwarzenegger was a $332 million cut from Medi-Cal's reserves (Mendel, San Diego Union-Tribune, 8/25). The cuts will not jeopardize services, however, because Medi-Cal is an entitlement program. If the reserve depletes, the Legislature would have to pass a supplemental appropriations bill to cover the costs (California Healthline, 8/24).

Schwarzenegger's administration contends that Medi-Cal's reserves have been overfunded over the past few years (Myers, "Capital Notes," KQED, 8/24).

Cuts to Mental Health Services

The governor also cut $55 million from the Integrated Services for Homeless Adults with Serious Mental Illness, a program that provides housing and treatment to homeless people with mental illnesses.

Department of Finance spokesperson H.D. Palmer said if the program is "a priority to counties, they have resources available to them to provide funding," such as Proposition 63, a 2004 ballot initiative that raised the state income tax for high-income residents to fund mental health services.

County mental health directors contend that using Proposition 63 funds to cover the program would be a violation of the ballot initiative, which prohibits counties from using the money to fund current programs.

Mental health advocates have pledged to sue the state over the veto (Gold et al., Los Angeles Times, 8/25).

Other Health Care-Related Cuts

The governor vetoed $13.8 million intended to help enroll about 94,000 eligible children for public health insurance programs, as well as $15 million in county grants under the Children's Outreach Initiative.

Californians for Healthy Kids in a statement said, "The decision to eliminate funding for these efforts directly contradicts the governor's and Legislature's stated goal of insuring all California children."

Schwarzenegger also vetoed $6.3 million intended for the state and counties to help the state implement the California Discount Prescription Drug Program (Lin/Sanders, Sacramento Bee, 8/25).

The governor ordered state health officials to find more than $6 million in other parts of the budget to sustain the program, but the cuts will delay a Web site the state was expected to create that notifies consumers of available discounts.

Other cuts included $1.3 million to track hospital efforts to eliminate infections, which account for more than 7,000 deaths in California annually (Los Angeles Times, 8/25).

Editorial, Opinion Piece

Summaries of an editorial and opinion piece addressing the governor's veto of funds for mental health services are provided below.

Sacramento Bee: Schwarzenegger's veto of funding for mental health services "put counties in a bind" as they work to consider ways to maintain financial support for programs that treat more than 4,700 people with severe mental illnesses, a Bee editorial states. Moreover, the governor's veto "defied the will of the voters as expressed in Proposition 63" (Sacramento Bee, 8/29).

Steve Lopez, Los Angeles Times: "If the governor was looking for savings, he could have taken his scalpel to an estimated $45 million tax break for the purchases of yachts, planes and RVs," rather than Integrated Services for Homeless Adults with Serious Mental Illness, Lopez writes in his Times column. Sen. Darrel Steinberg (D-Sacramento) -- who carried the bill that created the program -- indicated that the veto will compromise funding for other mental health programs as counties work to maintain support for adults with severe mental illnesses, according to Lopez (Lopez, Los Angeles Times, 8/29).

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